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Net assets, financial position, and results of operations

  • Earnings after taxes increased
  • Assets – Munich Airport is decreasing liquidity reserves

Results of operations

In fiscal year 2019, Munich Airport’s earnings after taxes (EAT) rose by T€ 28,220 to T€ 177,847. The reasons for this increase are explained in detail below.

Results of operations

 

 

 

 

 

 

Increase/decrease

T€

 

2019

 

2018

 

Absolute

 

Relative in %

1

This also includes income from companies valued using the equity method.

Revenue

 

1,567,967

 

1,508,817

 

59,150

 

3.9

Other income

 

43,165

 

44,894

 

-1,729

 

-3.9

Total income

 

1,611,132

 

1,553,711

 

57,421

 

3.7

Cost of materials

 

-413,210

 

-393,602

 

-19,608

 

5.0

Personnel expenses

 

-537,239

 

-507,713

 

-29,526

 

5.8

Other expenses

 

-106,369

 

-114,318

 

7,949

 

-7.0

EBITDA

 

554,314

 

538,078

 

16,236

 

3.0

Depreciation and amortization

 

-208,835

 

-214,578

 

5,743

 

-2.7

EBIT

 

345,479

 

323,500

 

21,979

 

6.8

Financial result1

 

-88,657

 

-100,978

 

12,321

 

-12.2

EBT

 

256,822

 

222,522

 

34,300

 

15.4

Income taxes

 

-78,975

 

-72,895

 

-6,080

 

8.3

EAT

 

177,847

 

149,627

 

28,220

 

18.9

In fiscal year 2019, the revenue of Munich Airport rose by T€ 59,150 or 3.9 percent to T€ 1,567,967.

In terms of revenue from airport charges (T€ 655,189; 2018: T€ 626,726), the largest contributor to revenue growth was passenger and landing charges.

In comparison with growth in MTOM (maximum take-off mass) and passenger figures, revenue from landing and passenger charges increased disproportionately higher, driven by price.

Revenue and volume growth in passenger and landing charges

In %

Revenue and volume growth in passenger and landing fees, landing fees: 4.6% revenue growth and 0.9% volume growth, passenger fees: 5.2% revenue growth and 0.9% volume growth

The increase in revenue from handling services of T€ 7,184 (+4.1 percent) in total resulted primarily in the area of ground handling services from the sustained growth of Deutsche Lufthansa.

Revenue in the other divisions developed as follows.

Breakdown of revenue of other areas

In T€

Revenues other areas in TEUR, 2019: retail 188,858, gastronomy and hotel 146,888, rental and leasing 111,286, parking 100,664, others 182,209

After more than 25 years of being in operation, there is an ongoing need to upgrade the buildings from the first stage of expansion at Munich Airport. Consequently, the expenses for refurbishment, optimization, and reconstruction measures are rising constantly. The cost of materials increased overall by T€ 19,608 or 5.0 percent.

Munich Airport’s personnel expenses are largely determined by the number of employees and the amount of remuneration paid to employees employed under the collective pay-scale agreement for public sector employees (TVöD). The collective payment under this agreement was increased by 3.09 percent effective April 1, 2019. The Group again created new jobs in the fiscal year. The average number of employees increased from 9,521 to 9,678 year on year. In total, personnel expenses rose by 5.8 percent to T€ 537,239.

The decline in other expenses by 7.0 percent to T€ 106,369 is due primarily to the introduction of IFRS 16 on January 1, 2019. Rental and leasing expenses reduced in this context by T€ 7,403 to T€ 4,139.

As in the previous year, depreciation and amortization expenses (T€ 208,835; 2018: T€ 214,578) include impairment losses of T€ 6,126 (2018: T€ 16,408), which mainly relate to planning services performed and construction period interest for construction projects not executed in this form. Impairment in the previous year resulted primarily from planning services provided, which must presumably be performed again due to the delay in building the third runway, most recently as a result of the postponement of the decision within the scope of the moratorium. Overall, the scheduled depreciation and amortization expenses increased by T€ 4,539 or 2.3 percent primarily due to the introduction of IFRS 16 on January 1, 2019. This gave rise for the first time to scheduled depreciation and amortization expenses of T€ 6,248.

The financial result (including the result from companies measured at equity) improved by T€ 12,321 to T€ -88,657. This was due primarily to the lower non-cash revaluation losses arising from the valuation of financial liabilities from interests in partnerships in «Other financial result», as well as the lower interest expenses from loans and financial liabilities resulting from interests in partnerships.

The tax expense includes current taxes in the amount of T€ 85,258 (previous year: T€ 83,975) and deferred taxes in the amount of T€ 6,283 (previous year: T€ 11,080). The income tax rate fell from 32.8 percent the previous year to 30.8 percent in fiscal year 2019.

Net assets and financial position

Financial position

 

 

 

 

 

 

Increase/decrease

T€

 

Dec. 31,2019

 

Dec. 31,2018

 

Absolute

 

Relative in %

1

Including assets classified as held for sale

2

Including financial liabilities resulting from partnerships

Non-current assets

 

5,151,911

 

5,010,340

 

141,571

 

2.8

Current assets1

 

390,112

 

357,327

 

32,785

 

9.2

thereof cash and cash equivalents

 

39,576

 

12,377

 

27,199

 

>100.0

Assets

 

5,542,023

 

5,367,667

 

174,356

 

3.2

Equity

 

2,378,139

 

2,224,996

 

153,143

 

6.9

Other non-current liabilities2

 

2,072,660

 

2,222,901

 

-150,241

 

-6.8

Other current liabilities2

 

1,091,224

 

919,770

 

171,454

 

18.6

Equity and liabilities

 

5,542,023

 

5,367,667

 

174,356

 

3.2

The increase in non-current assets (+T€ 141,571) at T€ 130,951 primarily affected property, plant, and equipment for own use. Owing to a large number of construction projects started the previous year, advance payments and assets under construction increased in total by T€ 214,744 to T€ 488,152. In addition, rights of use under leases were capitalized for the first time in accordance with IFRS 16.

Liquidity reserves at Munich Airport decreased from T€ 210,000 to T€ 169,000 in fiscal year 2019, because of numerous investments in construction projects. The cash was held at a number of banks as time deposits and money market transactions with a term of less than one year. They are held under current assets. In contrast, there was an increase in current receivables (+T€ 18,172), other assets (+T€ 26,630), and cash and cash equivalents (+T€ 27,199).

The previous year’s consolidated profit (T€ 149,627) was reduced by the distribution of T€ 30,000 to shareholders. The remaining amount was retained in fiscal year 2019.

Further repayments of loans will fall due in fiscal year 2020. This has led to a shift in borrowings from the non-current to the current segment. Overall, other liabilities were only slightly above the previous year’s level at 0.7 percent or T€ 21,213. Financial liabilities from leases in the amount of T€ 24,987 are included for the first time in accordance with IFRS 16.

The equity ratio increased primarily due to the income in the fiscal year.

Capital structure

 

 

 

 

 

 

Increase/decrease

T€

 

Dec. 31,2019

 

Dec. 31,2018

 

Absolute

 

Relative in %

Subscribed capital

 

306,776

 

306,776

 

0

 

0.0

Reserves

 

147,490

 

151,353

 

-3,863

 

-2.6

Other equity

 

1,923,854

 

1,766,853

 

157,001

 

8.9

of which annual profit/loss

 

177,847

 

149,627

 

28,220

 

18.9

Non-controlling interests

 

19

 

14

 

5

 

35.7

of which annual profit/loss

 

5

 

1

 

4

 

>100.0

Equity

 

2,378,139

 

2,224,996

 

153,143

 

6.9

 

 

 

 

 

 

 

 

 

Financial liabilities from interests in partnerships

 

354,047

 

346,058

 

7,989

 

2.3

 

 

 

 

 

 

 

 

 

Shareholder loans

 

491,913

 

491,913

 

0

 

0.0

 

 

 

 

 

 

 

 

 

Fixed-rate loans

 

722,576

 

682,314

 

40,262

 

5.9

Floating-rate loans

 

683,616

 

730,286

 

-46,670

 

-6.4

Loans

 

1,406,192

 

1,412,600

 

-6,408

 

-0.5

 

 

 

 

 

 

 

 

 

Derivatives

 

28,918

 

40,207

 

-11,289

 

-28.1

 

 

 

 

 

 

 

 

 

Other liabilities

 

882,814

 

851,893

 

30,921

 

3.6

 

 

 

 

 

 

 

 

 

Financial liabilities

 

3,163,884

 

3,142,671

 

21,213

 

0.7

 

 

 

 

 

 

 

 

 

Equity ratio

 

43%

 

41%

 

 

 

 

The main terms of Munich Airport’s current and non-current financial liabilities can be found in the table below.

Non-current loans conditions

 

 

 

 

 

 

 

 

Interest rate in %

Method of funding

 

Currency

 

Interest rate

 

Residual debt in T€

 

from

 

to

(As at December 31, 2019)

Financial liabilities resulting from interests in partnerships

 

EUR

 

Earnings-based

 

354,047

 

-

 

-

Shareholder loans

 

EUR

 

Variable/earnings-based

 

491,913

 

Base rate
plus margin

Loans

 

EUR

 

Floating rate

 

686,967

 

3M and 6M EURIBOR
plus margin

Loans

 

EUR

 

Fixed rate

 

724,292

 

0.48

 

3.47

The shareholder loans are available indefinitely and interest is charged on the basis of the base rate plus a margin, if the results and anticipated economic development allow this.

The loans bear usual non-financial covenants, including negative pledges and pari passu clauses. In addition, there are other general conventional agreements concerning repayment in the event of changes in shareholder structure. There are no financial covenants.

Munich Airport uses interest rate payer swaps and forward exchange transactions to hedge against risks arising from interest rate and exchange rate fluctuations. Interest rate hedges are accounted for as a valuation unit.

Hedging transaction conditions

 

 

 

 

 

 

Fixed rate
in %

 

Forward rate
in EUR/USD

 

 

Hedging instruments

 

Nominal
amount

 

Currency

 

from

 

to

 

from

 

to

 

Hedged
items

1

These hedges are not recognized.

Interest payer swaps

 

586,000

 

T€

 

0.60

 

2.33

 

-

 

-

 

Syndicated
loans

Forward exchange transactions1

 

2,280

 

T€

 

-

 

-

 

1.14

 

1.21

 

Expected
transactions

Liquidity

Sufficient funds were available from the net cash flow from operating activities in 2019 to ensure the liquidity of the Company in operations. Cash outflows from investing activities mainly arose from investments in construction projects. A negative cash flow arose from financing activities due to distributions to shareholders, repayment of debt, and interest repayments.

Cash flow statement

In T€

Cash flow statement in TEUR

Investments

In fiscal year 2019, investments in property, plant, and equipment for own use at Munich Airport was T€ 306,980 in total. This was offset by planned depreciation and amortization in the amount of T€ 192,851.

These investments primarily comprise costs for construction projects, which were not yet completed in fiscal year 2019. Inter alia, they include investments in relation to the development of AirSite West, the expansion and modernization of Terminal 1, and the extension of the railway tunnel for the Erdinger Ringschluss (Erding ring closure). Further explanations on this are included in the section «Key events in the past fiscal year».

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